Digital Turbine Reports Fiscal 2021 Third Quarter Results
Accelerating Platform Momentum Drove Third Quarter Revenue of $88.6 Million, Representing 146% Annual Growth
Revenue Diversification Strategy and Scalable Operating Model Are Continuing to Spur Significant Growth in Overall Profitability and Cash Flow
New Credit Facility to Provide Additional Support for Comprehensive Growth Strategy
Austin, TX – February 3, 2021 – Digital Turbine, Inc. (Nasdaq: APPS) announced financial results for the fiscal third quarter ended December 31, 2020. All operating results and historical comparisons discussed below, except as otherwise specifically noted, refer only to the continuing operations of the Company.
Recent Financial Highlights:
•Fiscal third quarter of 2021 revenue totaled $88.6 million, representing an increase of 146% as compared to total revenue reported in the fiscal third quarter of 2020. Application Media revenue increased 58% year-over-year to $56.9 million in the fiscal third quarter of 2021. Content Media revenue, which primarily included revenue related to the February 2020 acquisition of Mobile Posse, Inc. ("Mobile Posse"), totaled $31.7 million in the fiscal third quarter of 2021.
•GAAP net income for the fiscal third quarter of 2021, inclusive of a $4.7 million adjustment to the contingent earn-out related to the Mobile Posse acquisition, was $14.5 million, or $0.15 per share, as compared to GAAP net income of $3.3 million, or $0.04 per share, for the fiscal third quarter of 2020. Non-GAAP adjusted net income1 for the fiscal third quarter was $20.0 million, or $0.21 per share, as compared to non-GAAP adjusted net income of $5.0 million, or $0.05 per share, in the fiscal third quarter of 2020, representing growth of 278% in non-GAAP EPS.
•Non-GAAP adjusted EBITDA2 for the fiscal third quarter of 2021 was $22.5 million, representing growth of more than 300% as compared to Non-GAAP adjusted EBITDA of $5.6 million in the fiscal third quarter of 2020.
•GAAP cash provided by operating activities totaled $18.9 million in the fiscal third quarter of 2021, inclusive of the payment of $5.4 million of excess contingent consideration related to the Mobile Posse acquisition earn-out provisions. Non-GAAP free cash flow3 totaled $22.0 million in the fiscal third quarter of 2021, as compared to $7.0 million in the fiscal third quarter of 2020, representing growth of more than 200%.
•GAAP gross margin was 43% for the fiscal third quarter of 2021, as compared to 39% in the fiscal third quarter of 2020. Non-GAAP adjusted gross margin4 was 43% for the fiscal third quarter of 2021, as compared to 40% in the fiscal third quarter of 2020.
•The Company’s Application Media software was installed on approximately 65 million devices during the fiscal third quarter, and has now been installed on more than 570 million devices to date.
Digital Turbine Fiscal 2021 Third Quarter Results
February 3, 2021
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“Our strong third quarter results represented an acceleration of the breakout momentum achieved in the first half of the fiscal year,” said Bill Stone, CEO. “We once again set all-time quarterly records for revenue, profitability and free cash flow. Total revenue grew 146% year-over-year, as we saw strong demand for both our Application Media and Content Media service offerings. The amount of time and money spent by consumers within applications continues to rise, as consumers increasingly grow accustomed to consuming more content and spending greater share of their wallets using the applications on their mobile devices. Businesses everywhere have reacted accordingly by placing increased emphasis on the functionality and monetization potential of their application-based storefronts. These powerful secular tailwinds have been driving, and we believe will continue to drive, significantly greater demand for our unique platform offerings.”
“I was once again exceptionally pleased with the bottom-line profitability showcased by our platform business model during the quarter. Higher gross margins and expanding operating leverage enabled us to turn our 146% annual revenue growth into more than 300% annual growth in Non-GAAP adjusted EBITDA, 278% growth in Non-GAAP EPS, and more than 200% growth in Non-GAAP free cash flow, as we continue to benefit from network effects and economies of scale.”
Mr. Stone concluded, “We believe that we are still in the early stages of our growth story at Digital Turbine, as we continue to employ our core diversification strategy in an effort to more fully leverage our global distribution footprint with both existing and newly-developed products and services. Partners and advertisers across the platform are deriving clear monetary and strategic value from a wide range of our services that work cohesively to provide end consumers with highly-relevant information, entertainment and e-commerce options at their fingertips. We remain particularly excited about the potential to expand the reach of our Content Media services, and we are likewise optimistic about the potential growth in some of our other high-growth initiatives, such as Single-Tap. We look forward to providing updates on our progress related to these and other growth initiatives in the quarters to come.”
Third Quarter Fiscal 2021 Financial Results
Total revenue for the third quarter of fiscal 2021 was $88.6 million, representing an increase of 146% year-over-year. Application Media revenue increased 58% year-over-year to $56.9 million in the quarter, while Content Media revenue, which was primarily related to the February 2020 acquisition of Mobile Posse, totaled $31.7 million.
GAAP gross margin was 43% for the third quarter of fiscal 2021, as compared to a 39% GAAP gross margin in the third quarter of fiscal 2020. Non-GAAP adjusted gross margin4 was 43% for the third quarter of fiscal 2021, as compared to 40% for the third quarter of fiscal 2020.
GAAP net income for the third quarter of fiscal 2021, inclusive of a $4.7 million adjustment to the contingent earn-out provision, was $14.5 million, or $0.15 per share, as compared to GAAP net income for the third quarter of fiscal 2020 of $3.3 million, or $0.04 per share. Non-GAAP adjusted net income1 for the third quarter of fiscal 2021 was $20.0 million, or $0.21 per share, as compared to non-GAAP adjusted net income of $5.0 million, or $0.05 per share, during the third quarter of fiscal 2020.
Digital Turbine Fiscal 2021 Third Quarter Results
February 3, 2021
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Non-GAAP adjusted EBITDA2 was $22.5 million for the third quarter of fiscal 2021, as compared to non-GAAP adjusted EBITDA of $5.6 million for the third quarter of fiscal 2020. The reconciliations between GAAP and non-GAAP financial results for all referenced periods are provided in the tables immediately following the Unaudited Consolidated Statements of Cash Flows below.
New Credit Facility Agreement
On February 3, 2021, the Company entered into a new credit facility agreement with Bank of America, N.A., which provides for a revolving line of credit of $100 million, with an accordion feature enabling upsizing to $200 million, to be used for acquisitions, working capital and general corporate purposes. The revolving line of credit matures in 2024 and replaced the Company's prior term loan and credit facility.
“We are pleased to partner with Bank of America, N.A. on this new credit facility which offers greater financial flexibility and more attractive terms than our previous facility. We believe the new, larger facility will help support our current and future growth initiatives, enabling us to execute on our broader growth strategy,” said Barrett Garrison, CFO.
Business Outlook
Based on information available as of February 3, 2021, the Company currently expects the following for its full-year fiscal 2021 period:
•Revenue of between $298 million and $300 million
•Non-GAAP adjusted EBITDA of between $71 million and $72 million
•Non-GAAP adjusted EPS of $0.67, based on approximately 98 million diluted shares outstanding
It is not reasonably practicable to provide a business outlook for GAAP net income from continuing operations because the Company cannot reasonably estimate the changes in stock-based compensation expense, which is directly impacted by changes in the Company’s stock price, any adjustment to the contingent earn-out provision, which will continue to be adjusted to fair value through the end of the earn-out period, or other items that are difficult to predict with precision.
About Digital Turbine, Inc.
Digital Turbine simplifies content discovery and delivers relevant content directly to consumer devices. The Company’s on-demand media platform powers frictionless app and content discovery, user acquisition and engagement, operational efficiency and monetization opportunities. Digital Turbine’s technology platform has been adopted by more than 40 mobile operators and OEMs worldwide, and has delivered more than three billion app preloads for tens of thousands of advertising campaigns. The Company is headquartered in Austin, Texas, with global offices in Arlington, Durham, Mumbai, San Francisco, Singapore and Tel Aviv. For additional information visit www.digitalturbine.com.
Digital Turbine Fiscal 2021 Third Quarter Results
February 3, 2021
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Conference Call
Management will host a conference call today at 4:30 p.m. ET to discuss its fiscal third quarter financial results and provide additional operational updates on the business. To participate, interested parties should dial 855-238-2713 in the United States or 412-542-4111 from international locations. A webcast of the conference call will be available at ir.digitalturbine.com/events.
For those who are not able to join the live call, a playback will be available through February 10, 2021. The replay can be accessed by dialing 877-344-7529 in the United States or 412-317-0088 from international locations, passcode 10151854.
The conference call will discuss guidance and other material information.
Use of Non-GAAP Financial Measures
To supplement the Company’s consolidated financial statements presented in accordance with GAAP, Digital Turbine uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP adjusted net income and earnings per share (“EPS”), non-GAAP adjusted gross profit, non-GAAP adjusted gross margin, non-GAAP adjusted EBITDA and non-GAAP free cash flow. Reconciliations to the nearest GAAP measures of all non-GAAP measures included in this press release can be found in the tables below.
Non-GAAP measures are provided to enhance investors’ overall understanding of the Company's current financial performance, prospects for the future and as a means to evaluate period-to-period comparisons. The Company believes that these non-GAAP measures provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results. The Company believes the non-GAAP measures that exclude such items when viewed in conjunction with GAAP results and the accompanying reconciliations enhance the comparability of results against prior periods and allow for greater transparency of financial results. The Company believes non-GAAP measures facilitate management's internal comparison of its financial performance to that of prior periods as well as trend analysis for budgeting and planning purposes. The presentation of non-GAAP measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
1Non-GAAP adjusted net income and EPS are defined as GAAP net income and EPS adjusted to exclude the effect of stock-based compensation, amortization of intangibles, adjustments in the earn-out liability associated with the Mobile Posse acquisition, changes in the fair value of derivatives associated with warrants issued in connection with the September 2016 convertible notes offering and transaction expenses. Readers are cautioned that non-GAAP adjusted net income and EPS should not be construed as an alternative to comparable GAAP net income figures determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP.
Digital Turbine Fiscal 2021 Third Quarter Results
February 3, 2021
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2Non-GAAP adjusted EBITDA is calculated as GAAP net income excluding the following cash and non-cash expenses: net interest income/(expense), adjustments in the earn-out liability associated with the Mobile Posse acquisition, income tax provision, depreciation and amortization, stock-based compensation expense, amortization of intangibles, the change in fair value of derivatives associated with warrants issued in connection with the September 2016 convertible notes offering, other expense and transaction expenses. Readers are cautioned that non-GAAP adjusted EBITDA should not be construed as an alternative to net income determined in accordance with U.S. GAAP as an indicator of performance, which is the most comparable measure under GAAP.
3Non-GAAP free cash flow, which is a non-GAAP financial measure, is defined as net cash provided by operating activities (as stated in our Consolidated Statement of Cash Flows), excluding acquisition-related contingency payments, reduced by capital expenditures. Readers are cautioned that free cash flow should not be construed as an alternative to net cash provided by operating activities determined in accordance with U.S. GAAP as an indicator of profitability, performance or liquidity, which is the most comparable measure under GAAP.
4Non-GAAP adjusted gross profit and gross margin are defined as GAAP gross profit and gross margin adjusted to exclude the effect of depreciation of software. Readers are cautioned that non-GAAP adjusted gross profit and gross margin should not be construed as an alternative to gross margin determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP.
Non-GAAP adjusted gross profit and gross margin, non-GAAP adjusted EBITDA, non-GAAP adjusted net income and EPS, and non-GAAP free cash flow are used by management as internal measures of profitability, performance and liquidity. They have been included because the Company believes that the measures are used by certain investors to assess the Company’s financial performance before non-cash charges and certain costs that the Company does not believe are reflective of its underlying business.
Forward-Looking Statements
This news release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this news release that are not statements of historical fact and that concern future results from operations, financial position, economic conditions, product releases and any other statement that may be construed as a prediction of future performance or events, including financial projections and growth in various products are forward-looking statements that speak only as of the date made and which involve known and unknown risks, uncertainties and other factors which may, should one or more of these risks uncertainties or other factors materialize, cause actual results to differ materially from those expressed or implied by such statements. These factors and risks include:
•a decline in general economic conditions nationally and internationally
•decreased market demand for our products and services
•market acceptance and brand awareness of our products
•risks associated with indebtedness
•the ability to comply with financial covenants in outstanding indebtedness
•the ability to protect our intellectual property rights
•risks associated with adoption of our platform among existing customers (including the impact of possible delays with major carrier and OEM partners in the roll out for mobile phones deploying our platform)
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February 3, 2021
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•actual mobile device sales and sell-through where our platform is deployed is out of our control
•risks associated with our ability to manage the business amid the COVID-19 pandemic
•the impact of COVID-19 on our partners, digital advertising spend and consumer purchase behavior
•the impact of COVID-19 on our results of operations
•risks associated with new privacy laws, such as the European Union’s GDPR and similar laws which may require changes to our development and user interface for certain functionality of our mobile platform
•risks associated with the timing of our platform software pushes to the embedded bases of carrier and OEM partners
•risks associated with end user take rates of carrier and OEM software pushes which include our platform
•new customer adoption and time to revenue with new carrier and OEM partners is subject to delays and factors out of our control
•risks associated with fluctuations in the number of our platform slots across US carrier partners
•required customization and technical integration which may slow down time to revenue notwithstanding the existence of a distribution agreement
•risks associated with delays in major mobile phone launches, or the failure of such launches to achieve the scale
•customer adoption that either we or the market may expect
•the difficulty of extrapolating monthly demand to quarterly demand
•the challenges, given the Company’s comparatively small size, to expand the combined Company's global reach, accelerate growth and create a scalable, low-capex business model that drives EBITDA (as well as adjusted EBITDA)
•ability as a smaller company to manage international operations
•varying and often unpredictable levels of orders; the challenges inherent in technology development necessary to maintain the Company's competitive advantage such as adherence to release schedules and the costs and time required for finalization and gaining market acceptance of new products
•changes in economic conditions and market demand
•rapid and complex changes occurring in the mobile marketplace
•pricing and other activities by competitors
•technology management risk as the Company needs to adapt to complex specifications of different carriers and the management of a complex technology platform given the Company's relatively limited resources
•risks and uncertainties associated with the integration of the acquisition of Mobile Posse, including our ability to realize the anticipated benefits of the acquisition and the satisfaction of related earn-out provisions
•other risks including those described from time to time in Digital Turbine's filings on Forms 10-K and 10-Q with the Securities and Exchange Commission (SEC), press releases and other communications.
You should not place undue reliance on these forward-looking statements. The Company does not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Investor Relations Contacts:
Brian Bartholomew
brian.bartholomew@digitalturbine.com
Digital Turbine, Inc.
SOURCE: Digital Turbine, Inc.
Digital Turbine Fiscal 2021 Third Quarter Results
February 3, 2021
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Digital Turbine, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income
(in thousands, except per share amounts)
| | | | | | | | | | | | | | |
| | 3 Months Ended December 31, |
| | 2020 | | 2019 |
| | (Unaudited) | | (Unaudited) |
| Net revenues | | $ | 88,592 | | | $ | 36,016 | |
| Cost of revenues | | | | |
| License fees and revenue share | | 50,144 | | | 21,576 | |
| Other direct costs of revenues | | 749 | | | 400 | |
| Total cost of revenues | | 50,893 | | | 21,976 | |
| Gross profit | | 37,699 | | | 14,040 | |
| Operating expenses | | | | |
| Product development | | 5,202 | | | 2,783 | |
| Sales and marketing | | 5,219 | | | 2,815 | |
| General and administrative | | 6,761 | | | 4,310 | |
| Total operating expenses | | 17,182 | | | 9,908 | |
| Income from operations | | 20,517 | | | 4,132 | |
| Interest and other income / (expense), net | | | | |
| Interest income / (expense), net | | (266) | | | 59 | |
| Change in fair value of warrant liability | | — | | | (870) | |
| Change in estimated contingent consideration | | (4,662) | | | — | |
| Other income / (expense) | | (13) | | | (19) | |
| Total interest and other income / (expense), net | | (4,941) | | | (830) | |
| Income from continuing operations before income taxes | | 15,576 | | | 3,302 | |
| Income tax provision | | 1,061 | | | 41 | |
| Income from continuing operations, net of taxes | | 14,515 | | | 3,261 | |
| Income from discontinued operations | | — | | | 65 | |
| Net loss from discontinued operations, net of taxes | | — | | | 65 | |
| Net income | | $ | 14,515 | | | $ | 3,326 | |
| Other comprehensive loss | | | | |
| Foreign currency translation adjustment | | (132) | | | (44) | |
| Comprehensive income | | $ | 14,383 | | | $ | 3,282 | |
| Basic net loss per common share | | | | |
| Continuing operations | | $ | 0.16 | | | $ | 0.04 | |
| Discontinued operations | | — | | | — | |
| Net income | | $ | 0.16 | | | $ | 0.04 | |
| Weighted-average common shares outstanding, basic | | 89,003 | | | 85,876 | |
| Diluted net loss per common share | | | | |
| Continuing operations | | $ | 0.15 | | | $ | 0.04 | |
| Discontinued operations | | — | | | — | |
| Net income | | $ | 0.15 | | | $ | 0.04 | |
| Weighted-average common shares outstanding, diluted | | 96,976 | | | 92,472 | |
Digital Turbine Fiscal 2021 Third Quarter Results
February 3, 2021
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Digital Turbine, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except par value and share amounts)
| | | | | | | | | | | | | | |
| | December 31, 2020 | | March 31, 2020 |
| | (Unaudited) | | |
| ASSETS | | | | |
| Current assets | | | | |
| Cash | | $ | 43,659 | | | $ | 21,534 | |
| Restricted cash | | — | | | 125 | |
Accounts receivable, net of allowances of $4,913 and $4,059, respectively | | 59,027 | | | 33,135 | |
| Prepaid expenses and other current assets | | 1,955 | | | 3,653 | |
| Total current assets | | 104,641 | | | 58,447 | |
| Property and equipment, net | | 11,670 | | | 8,183 | |
| Right-of-use assets | | 3,807 | | | 4,237 | |
| Intangible assets, net | | 41,871 | | | 43,882 | |
| Goodwill | | 70,452 | | | 69,262 | |
| TOTAL ASSETS | | $ | 232,441 | | | $ | 184,011 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
| Current liabilities | | | | |
Short-term debt, net of issuance costs of $62 and $62, respectively | | $ | 1,938 | | | $ | 1,188 | |
| Accounts payable | | 34,142 | | | $ | 31,579 | |
| Accrued license fees and revenue share | | 36,188 | | | 19,423 | |
| Accrued compensation | | 8,340 | | | 4,311 | |
| Accrued earn-out | | 10,000 | | | 23,735 | |
| Other current liabilities | | 7,849 | | | 2,573 | |
| Total current liabilities | | 98,457 | | | 82,809 | |
Long-term debt, net of issuance costs of $198 and $245, respectively | | 17,052 | | | 18,505 | |
| Other non-current liabilities | | 4,758 | | | 5,243 | |
| Total liabilities | | 120,267 | | | 106,557 | |
| Stockholders' equity | | | | |
| Preferred stock | | | | |
Series A convertible preferred stock at $0.0001 par value; 2,000,000 shares authorized, 100,000 issued and outstanding (liquidation preference of $1,000) | | 100 | | | 100 | |
| Common stock | | | | |
$0.0001 par value: 200,000,000 shares authorized; 90,143,539 issued and 89,409,083 outstanding at December 31, 2020; 88,041,240 issued and 87,306,784 outstanding at March 31, 2020 | | 10 | | | 10 | |
| Additional paid-in capital | | 370,435 | | | 360,224 | |
Treasury stock (754,599 shares at December 31, 2020 and March 31, 2020) | | (71) | | | (71) | |
| Accumulated other comprehensive loss | | (910) | | | (591) | |
| Accumulated deficit | | (257,390) | | | (282,218) | |
| Total stockholders' equity | | 112,174 | | | 77,454 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 232,441 | | | $ | 184,011 | |
Digital Turbine Fiscal 2021 Third Quarter Results
February 3, 2021
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Digital Turbine, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
| | | | | | | | | | | | | | |
| | 3 Months Ended December 31, |
| | 2020 | | 2019 |
| | (Unaudited) | | (Unaudited) |
| Cash flows from operating activities | | | | |
| Net income from continuing operations, net of taxes | | 14,515 | | | 3,261 | |
| Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | | | | |
| Depreciation and amortization | | 1,821 | | | 540 | |
| Loss on disposal of fixed assets | | — | | | (4) | |
| Change in provision for doubtful accounts | | 257 | | | 48 | |
| Non-cash interest expense | | 19 | | | — | |
| Stock-based compensation | | (123) | | | 744 | |
| Stock-based compensation for services rendered | | 283 | | | 173 | |
| Change in fair value of warrant liability | | — | | | 870 | |
| Change in estimated contingent consideration | | 4,662 | | | — | |
| Payment of contingent consideration in excess of amount capitalized at acquisition | | (5,419) | | | — | |
| (Increase) / decrease in assets: | | | | |
| Accounts receivable | | (13,011) | | | (1,439) | |
| Deferred tax assets | | — | | | 7 | |
| Prepaid expenses and other current assets | | 61 | | | (743) | |
| Right-of-use assets | | 186 | | | 104 | |
| Increase / (decrease) in liabilities: | | | | |
| Accounts payable | | (2,213) | | | (1,493) | |
| Accrued license fees and revenue share | | 13,988 | | | 4,634 | |
| Accrued compensation | | 2,804 | | | 889 | |
| Other current liabilities | | 1,268 | | | 904 | |
| Other non-current liabilities | | (152) | | | (105) | |
| Net cash provided by operating activities - continuing operations | | 18,946 | | | 8,390 | |
| Net cash provided by operating activities - discontinued operations | | — | | | 47 | |
| Net cash provided by operating activities | | 18,946 | | | 8,437 | |
| | | | |
| Cash flows from investing activities | | | | |
| Capital expenditures | | (2,366) | | | (1,374) | |
| Net cash used in investing activities | | (2,366) | | | (1,374) | |
| | | | |
| Cash flows from financing activities | | | | |
| Payment of contingent consideration | | (7,655) | | | — | |
| Options and warrants exercised | | 2,399 | | | 1,541 | |
| Repayment of debt obligations | | (500) | | | — | |
| Net cash (used in) / provided by financing activities | | (5,756) | | | 1,541 | |
| | | | |
| Effect of exchange rate changes on cash | | (132) | | | (44) | |
| | | | |
| Net change in cash | | 10,692 | | | 8,560 | |
| | | | |
| Cash and restricted cash, beginning of period | | 32,967 | | | 25,319 | |
| | | | |
| Cash and restricted cash, end of period | | 43,659 | | | 33,879 | |
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February 3, 2021
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| | | | | | | | | | | | | | |
| GAAP GROSS MARGIN TO NON-GAAP GROSS MARGIN |
| (in thousands) | | | | |
| | 3 Months Ended December 31, |
| | 2020 | | 2019 |
| | (Unaudited) | | (Unaudited) |
| Continuing operations | | | | |
| Revenue | | $ | 88,592 | | | $ | 36,016 | |
| Gross profit | | 37,699 | | | 14,040 | |
| Gross margin percentage | | 43 | % | | 39 | % |
| Add-back items: | | | | |
| Depreciation of software | | 748 | | | 400 | |
| Non-GAAP gross profit from continuing operations | | $ | 38,447 | | | $ | 14,440 | |
| Non-GAAP gross margin percentage from continuing operations | | 43 | % | | 40 | % |
| | | | |
| | | | |
| GAAP NET INCOME / (LOSS) TO NON-GAAP ADJUSTED NET INCOME |
| (in thousands) | | | | |
| | 3 Months Ended December 31, |
| | 2020 | | 2019 |
| | (Unaudited) | | (Unaudited) |
| Continuing operations | | | | |
| Net income from continuing operations | | 14,515 | | | 3,261 | |
| Add-back items: | | | | |
| Stock and stock option compensation | | 160 | | | 917 | |
| Amortization of intangibles | | 670 | | | — | |
| Adjustment for estimated earn-out liability | | 4,662 | | | — | |
| Change in fair value of warrant liability | | — | | | 870 | |
| Transaction expenses | | 12 | | | — | |
| Non-GAAP adjusted net income from continuing operations | | $ | 20,019 | | | $ | 5,048 | |
| Non-GAAP adjusted net income per share from continuing operations | | $ | 0.21 | | | $ | 0.05 | |
| Weighted-average common shares outstanding, diluted | | 96,980 | | | 92,472 | |
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| | | | | | | | | | | | | | |
| GAAP NET INCOME / (LOSS) TO NON-GAAP ADJUSTED EBITDA |
| (in thousands) | | | | |
| | 3 Months Ended December 31, |
| | 2020 | | 2019 |
| | (Unaudited) | | (Unaudited) |
| Continuing operations | | | | |
| Net income from continuing operations | | 14,515 | | | 3,261 | |
| Add-back items: | | | | |
| Stock and stock option compensation | | 160 | | | 917 | |
| Amortization of intangibles | | 670 | | | — | |
| Depreciation expense | | 1,151 | | | 540 | |
| Interest (income) / expense, net | | 266 | | | (59) | |
| Change in estimated contingent consideration | | 4,662 | | | — | |
| Other (income) / expense, net | | 13 | | | 19 | |
| Change in fair value of warrant liability | | — | | | 870 | |
| Income tax provision | | 1,061 | | | 41 | |
| Transaction expenses | | 12 | | | — | |
| Non-GAAP adjusted EBITDA from continuing operations | | $ | 22,510 | | | $ | 5,589 | |
| | | | | | | | | | | | | | |
| GAAP CASH FLOW FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS TO NON-GAAP FREE CASH FLOW FROM CONTINUING OPERATIONS |
| (in thousands) | | | | |
| | 3 Months Ended December 31, |
| | 2020 | | 2019 |
| | (Unaudited) | | (Unaudited) |
| Net cash provided by operating activities from continuing operations | | 18,946 | | | 8,390 | |
| Capital expenditures | | (2,366) | | | (1,374) | |
| Payment of contingent consideration in excess of amount capitalized at acquisition | | $ | 5,419 | | | $ | — | |
| Non-GAAP free cash flow provided by continuing operations | | $ | 21,999 | | | $ | 7,016 | |
